Stocks reverse gains to close near session lows, Dow ends below 15000

Stocks reversed their earlier gains in the last hour of trading to close near session lows Monday, with the Dow ending below the psychologically-important 15,000 level, as traders cited jitters over Syria.

The Dow Jones Industrial Average fell 64.05 points to end at 14,946.46, dragged by Proctor & Gamble and Microsoft. The index is on track for its biggest monthly loss since last May.

The S&P 500 declined 6.72 points to close at 1,656.78. And the Nasdaq dipped 0.22 points to finish at 3,657.57. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, jumped above 14.

Most key S&P sectors ended lower, dragged by telecoms and consumer staples, while health care eked out a gain.

Volume settled at its lightest level this year, with only 2.2 billion shares changing hands on the New York Stock Exchange. Average NYSE total volume this year has been approximately 3.25 billion shares a day.

Earlier, U.S. Secretary of State John Kerry said all nations must stand up for accountability on the use of chemical weapons in Syria.

"Make no mistake: President Obama believes there must be accountability for those who would use the world's most heinous weapons against the world's most vulnerable people," said Kerry.

Adding to woes, the Treasury will reach its debt limit in mid-October, Dow Jones reported, citing sources familiar with the matter. Treasury Secretary Jack Lew said earlier this year that the debt ceiling was unlikely to be reached until September.

Stocks traded modestly higher for most of the session as a weaker-than-expected durable goods report eased worries that the Federal Reserve will scale back its stimulus efforts.

Durable goods orders slumped in July, according to the Commerce Department, recording their biggest drop in nearly a year and snapping three straight months of gains.

"With durable goods orders plunging in July, the Fed has an additional reason—in addition to the rise in mortgage rates and the mixed housing data—that QE tapering should start small," according to a note from Strategas Research Partners. "We continue to believe that the smaller the Fed wants to move, the sooner they should start, since the unemployment rate has continued its decline toward 7 percent. To be sure, there is an important payroll employment report coming next week, and today's weakness in durables orders makes that employment release even more important. Solid employment has led us to believe that business capex will return (the two have been highly positively correlated historically). Based on today's durables report, that hasn't happened yet."

Amgen soared to lead the S&P 500 gainers after the biopharmaceutical giant said it will acquire cancer drug maker Onyx Pharmaceuticals in a deal worth about $10.4 billion, marking the fifth-largest biotech acquisition ever. At least two brokerages lifted their price targets on Amgen, while Piper Jaffray boosted its rating on the firm to "overweight" from "neutral."

Meanwhile, BATS Global Markets and Direct Edge said they would merge in a deal that would create the second-largest U.S. stock exchange. Financial terms of the transaction were not immediately announced. the deal is expected to close in the first half of 2014.

Microsoft edged lower following a 7-percent surge on Friday after the technology giant said its longtime chief executive officer, Steve Ballmer, planned to retire within a year. BMO raised its price target on the company to $37 from $34 with a "market perform" rating.

Tesla rallied following a report from California New Car Dealers Association that its Model S is gaining popularity in California. Shares of the electric carmaker have skyrocketed nearly 400 percent year to date.

In Asia, China stocks outperformed other equity markets on economic optimism following economic data out of the U.S. on Friday. The Shanghai Composite rose to a one-week high, South Korea's Kospi hit a three-day high, Australian equities were steady around 5,137 points but Japan's Nikkei bucked the trend to dip 0.2 percent.

Meanwhile in Europe, shares were mixed in morning trade, while the U.K.'s FTSE 100 was closed for a public holiday. Dutch telecoms group KPN on Monday announced improved terms for the sale of its German business to Spanish telecom firm Telefonica, and shares in both companies rose on the news.